Analysis questions value of ACA deductible cap

Originally posted February 14, 2014 by Bruce Shutan on

In a sign of just how difficult it is to rein in out-of-pocket costs, 35% of 2014 bronze-level plans in the Small Business Health Options Program exchange had deductibles that exceeded suggested annual caps under the Affordable Care Act. The conclusion was based on a HealthPocket analysis of government data from small group health plans in 32 states.

Another key finding was that the lowest level of coverage generated the highest possible costs. A whopping 96% of 2014 bronze-metal SHOP plans, for example, had deductibles of more than the ACA’s $2,000 individual and $4,000 family limits. That same result wasn’t nearly as prevalent for silver or gold plans (28% and 6%, respectively, for individuals and 88% and 6%, respectively, for families), nor was it an issue at the platinum level.

At the bronze level, the medical deductible for an individual enrollee averaged more than twice the amount of the original deductible limit at $4,216 and $8,667 for family coverage, while the annual cap on out-of-pocket costs averaged $6,224 for an individual and $12,518 for a family.

Any strict enforcement of the deductible caps could have substantially narrowed the inventory of health plans in the SHOP exchange, according to the study, which found that fewer than 4% of bronze-tier plans would have satisfied the ACA limits for individual and family enrollees. Small group plans are able to exceed the deductible caps only under the condition of necessity.

“The government effectively abandoned the deductible cap since it would prevent a significant minority of plans from meeting their actuarial value requirements,” explains Kev Coleman, head of research and data at HealthPocket, Inc. and a co-author of the study. He says the U.S. Department of Health and Human Services indicated in February 2013 that these deductible limits must be “applied so as to not affect the actuarial value of any health plan.”

But if the first few months of the HIX marketplace are any indication, there could be changes made that force plans to be re-designed. The study noted that if the deductible cap waivers are removed from future regulations, “then almost all qualified bronze plans would have to decrease their deductibles to satisfy the limits. Decreased deductibles could, in turn, require increases in other categories of enrollee cost-sharing such as co-payments in order for the plans to maintain their actuarial values.”

Last August, U.S. Rep. Tom Reed (R-NY) introduced H.R. 2995, which would eliminate the deductible caps for SHOP marketplace plans. The bill, which was referred to the House Committee on Energy and Commerce, has five co-sponsors.

State exchanges not viable choice for active employees

Originally posted October 03, 2013 by Andrea Davis on

The state and federally facilitated health care exchanges are not a realistic option for active employees, according to one expert. Bryce Williams, managing director of exchange solutions for Towers Watson maintains that while the public exchanges offer a good solution for early retirees and COBRA-eligible participants, “it’s not yet a viable alternative to move [active employees] to state or public exchanges.”

Employers showed little confidence in public exchanges, according to a recent survey from Towers Watson that was released prior to the public exchange launch earlier this week. Eighty-eight percent of employers said they were not confident that the public health insurance exchanges would provide a viable alternative to employer-sponsored coverage for active full-time employees in 2014.

“They were prescient in terms of what would happen given the complexity of the launch,” says Williams.

Employers expressed skepticism even heading into 2015, with 71% saying they were not confident the public exchanges would provide a viable alternative to employer-sponsored coverage for active full-time employees.

“We believe later this fall public exchanges will right themselves and be in good shape, but certainly they’ve gotten off to a bumpy start,” says Williams, adding he continues to see employers not making any big changes this year. “They want to see results.”

Still, “public exchanges continue to be a great alternative to early retiree coverage, to any of the mini-meds they’re providing to seasonal and part-time workers – this [public exchange] is a vastly better ecosystem and [offers] better coverage,” he says.

Towers Watson runs three private exchanges: OneExchange Retiree, a Medicare exchange for retirees; OneExchange Active, a self-insured exchange for active employees; and OneExchange Access, a concierge service that connects part-time employees, early retirees, dependents and others who aren’t eligible for employer-sponsored coverage, to the state exchanges.

Small-group employers skip SHOP, move to individual exchanges

Originally posted October 03, 2013 by Elizabeth Galentine, additional reporting by Brian Kalish on

While President Barack Obama has frequently told Americans, “if you like your plan, you can keep it,” that is not ringing true for some small groups across the country. A number of small-group employers are already planning to send their employees to the Affordable Care Act’s exchanges. It’s an outcome predicted by many in the industry, but one surprise to some is the choice of exchange.

Rather than utilize the Small Business Health Options Program (SHOP exchanges) that the ACA has set up for employer groups of 50 or fewer full-time employees, some brokers are finding their clients are more interested in sending their employees to the individual exchanges instead.

Kelly Fristoe, owner of Financial Partners in Wichita Falls, Texas, is wary of the fact that his state’s SHOP exchange only has one insurance company participating at this point. Rather than deal with potential consequences of that, he is steering his small-group clients interested in the exchange market toward the individual plans. “We’ve had some small-group customers — not a lot — telling us that they’re going to dump their plan and send their employees to the individual market,” says Fristoe, president of the Texas Association of Health Underwriters.

“So we’ve made some arrangements with those employers to be able to be the agent that sits with those employees. They’re going to let us have time with their employees to educate them on purchasing insurance through the marketplace and qualifying for a subsidy.”

Because he wants to keep those individuals as clients no matter what, Fristoe was particularly “frustrated” Tuesday when technical glitches kept him from checking out the plans on “I’m needing to salvage that business and I need to know what those individual rates are so that I can go back to those people and show them how to qualify for a subsidy, if they qualify, and get them enrolled,” he says. “… We’re going to be the agent that’s going to try to salvage that business instead of it going to one of our competitors.”

David Smith, vice president at Ebenconcepts in Morrisville, N.C., agrees that accessing the information on exchange rates is of the utmost importance right now. “You have to recognize that we’re going to have some percentage of very small groups that have already decided they’re not going to offer a group health insurance plan next year,” he says. “So if you have four or five employees a lot of them have made a business decision to not do it, and they just want to get a feel for what it’s going to cost their employees when they make that decision.”

As an administrator for the testing process for agents to be certified with Covered California, Neil Crosby, director of sales at Warner Pacific Insurance Services in Westlake Village, Calif., is surprised that the majority of people attending his classes so far have been serving the individual market. “I’m shocked at how many … are coming to primarily do it individually. There’s so many of them,” he says. “Some of the ones that do individual they also do small group, of course, but a lot of them are representing the individual. I’d say maybe 65% of people in the room.”

A lot of agency owners “want to get a feel for” for the individual market exchanges, says Ebenconcepts’ Smith, because it is very appealing for micro groups, those with nine, 10 employees, to “go to the marketplace for subsidized coverage and maybe pay less for that than they would for their group insurance today.” An employer who is looking at saving $3,500 to $5,000 in premiums by making the switch, “they’re not walking that border, they’re running to that border,” says Smith.

A common sentiment among several brokerages contacted by EBAEBN’ssister publication, in the days following the opening of the exchanges was that they have yet to take a look at the individual or SHOP exchanges. While online enrollment in SHOP exchanges run by the federal government is delayed until Nov. 1, applicants still have the option of submitting over the phone or through the mail.

Some are using the delay as a reason not to take a look at SHOP exchanges yet, but Michael Wolff, chief operations and financial officer at Dickerson Employee Benefits in Los Angeles, cautions against such an approach. “I don’t think that’s a good idea. … I think you want to have all the tools in your tool box. In California at least they have been successful in negotiating with the carriers to come to the table and give their best offers … there’s a chance they are giving a very good rate,” he says.

Wolff references the SHOP exchange tax credit for small businesses with low-wage earners that is available for 2014. “Of course we don’t know how long that will be upheld, but it’s a real tax advantage for next year at least,” he says. “… Why not have it in your portfolio to show? Everybody’s talking about it. You don’t want to say, ‘Well, I don’t know about it, but it’s probably bad because [it’s] the government [offering it].’ Well, maybe some clients will believe you, but it’s a better story if you say, ‘Yeah, I have that, and this is what they offer.’ Why would you not?

“Our model is … to bring a representation of the market to the agent and to the client,” adds Wolff, whose agency is one of only four in the state of California authorized to be a wholesaler for Covered California’s SHOP exchange, which did open on time Oct. 1. “This is a market phenomenon right now that we want to offer and explain. That is our role. We are ready.”

Meanwhile, like millions of others in the last few days, Don Garlitz, executive director of exchange technology provider bswift Exchange Solutions, logged on to a couple of SHOP exchanges to do a little window shopping. However, he could not get past the registration screen. If people are going to purchase such plans, the window shopping experience needs to improve, he says.

“People will look until they [get] what they want. [On Tuesday] I wasn’t able to find any kind of window shopping experience, which will be important for consumers,” he said. “They will not want to go through a 35-45 minute application process just to look at a rate. The call center I spoke with was not sure if there would be window shopping available. That will be an important thing for the federal government to consider.”

Health Q&A: ‘Obamacare’ Exchanges Start as Questions Abound

Originally posted September 30, 2013 by Alex Nussbaum on

Obamacare’s insurance exchanges debut tomorrow and so far the run-up has looked a lot like a political campaign, with dueling TV ads, door-knocking volunteers and a focus on swing-state targets.

Just don’t expect the usual ending to an election: a clear winner at the end of the day.

While the exchanges are expected to open on time, that milestone is unlikely to settle the 3 1/2-year grudge match over the Affordable Care Act. A long enrollment season, complicated by a threatened U.S. government shutdown and a growing list of technical glitches, means it may be as late as April before it’s known how many uninsured Americans sign up under the law.

While the shutdown won’t stop the roll-out, which is largely funded through mandatory appropriations that can’t be curtailed by congressional inaction, it’s an open question whether it will lessen public enthusiasm to enroll. In the meantime, technical glitches are beginning to surface.

People in Oregon, for example, won’t be able to enroll in a plan for the first few weeks unless they go through a broker or designated nonprofit groups, and the exchange in the nation’s capital won’t include premium prices until mid-November.

The Obama administration says other glitches are inevitable as the system starts up. The question is how serious and how long it takes the exchange to fix any issues. An extended crash or a problem calculating subsidies could be an embarrassment for the White House -- and sour consumers just as the administration tries to convince them to enroll.

‘In Between’

“Is it going to be a train wreck, a complete failure? The answer is no,” said Dan Schuyler, a director at Leavitt Partners, a Salt Lake City-based health care consultant. “Is it going to be completely seamless and instantaneous? No. It is going to be somewhere in between.”

The exchanges are at the heart of the law’s efforts to cover more of the 48 million uninsured Americans. About 7 million people will use the system to buy subsidized insurance by the end of the first open enrollment period on March 31, according to congressional projections.

Republicans will spotlight any problem as proof the law is a disaster. Democrats say they’ll overcome technical glitches and the law will sell itself as the uninsured gain benefits. Polls show most Americans side with the skeptics.

“The lights will go on Oct. 1, but they may flicker,” said Jocelyn Guyer, a director at the Washington-based consultant Manatt Health Solutions. “I worry the most about people making premature judgments on the first couple of weeks.”

The Breakdown

Here’s a primer on what to look for, based on interviews with consultants, insurers, analysts and state and federal officials:

Q: Who runs the exchanges?

A: Fourteen states have their own on-line exchanges, with the rest run in whole or part by the U.S. government.

Q: Who will use them?

A: The exchanges are open to people who buy coverage on their own and employees of businesses with 50 or fewer workers, as well as those currently shut out of insurance because of cost or a medical condition.

Subsidies are available, on a sliding scale, to those making as much as four times the poverty level, which is $11,500 for a single person and $24,000 for a family of four. Those making less than 138% of poverty will be eligible for Medicaid if they live in one of the 26 states set to expand the program.

Sign-Up Numbers

Q: How many people will sign up early on?

A: Call it lowering expectations or a realistic assessment: either way, supporters say they don’t expect a flood of enrollees this week.

Insurance buyers have to pay their first month’s premium within 30 days of choosing a plan and the policies don’t take effect until Jan. 1. As a result, the Obama administration says most people will wait until late November or December. Another surge may come in March as the end of the enrollment period nears.

Q: What happens if the federal government shuts down?

A: The exchanges will march on. That’s because the 2010 law relies primarily on mandatory spending, which congressional inaction can’t stop. It’s the budget category used for benefits such as Medicare, the U.S. health plan for the elderly and disabled, and Social Security.

The U.S. Health and Human Services Department said in a Sept. 27 memo it “would continue large portions of ACA activities, including coordination between Medicaid and the marketplace” in the event of a temporary shutdown.

Core Unaffected

“Many of the core parts of the health-care law are funded through mandatory appropriations and wouldn’t be affected,” Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight at HHS, told reporters on Sept. 24.

Q: Okay, so most of the exchanges will be up and running on time. How do you access them?

A: If all goes as planned, those not covered through work will be able to go on line or dial a call-in center, learn if they’re eligible for tax credits and choose from a menu of private plans. The exchanges can be found

Q: Who won’t use them?

A: Most of us. People who have insurance through their jobs, about 55% of Americans, aren’t directly affected by the law and are automatically in compliance with its mandate that everyone be insured. So are older Americans covered through Medicare.

Individual Mandate

Q: Do I have to buy insurance?

A: Yes, or pay a fine. The law requires that most Americans be insured starting Jan. 1. That can be through work, a government program like Medicare or Medicaid, or by buying on the exchanges. Those who opt out face a penalty starting next year at $95 or 1% of household income, whichever is higher. By 2016, it rises to $695 per individual or 2.5% of household income, whichever is greater.

Q: Is the technology for the exchanges in place?

A: Building the exchanges has been a massive technical lift, requiring computer systems with real-time links to dozens of state and U.S. agencies and private carriers. The administration says the system is ready to go, albeit with delays and reduced capabilities in places like Oregon and Washington.

Company Mandate

Q: Has anything else been delayed?

A: The law requires that large companies offer benefits to anyone working more than 30 hours a week. In July, that rule was postponed until 2015 to ease the burden of compliance.

Last week, officials said a Spanish-language version of the federal website won’t be ready until mid-October and an exchange for small business workers won’t take enrollments until November. Nevada and California also won’t transmit names of new customers to insurers for about a month, Schuyler said.

Q: Will the coverage be affordable?

A: It depends on who you are and where you live. Six in 10 uninsured people will find insurance for less than $100 a month because of subsidies and expansions to Medicaid, the administration said last week. Those who make too much for assistance may be in for sticker shock: the same report said even bare-bones coverage, known as a bronze plan, will average almost $3,000 a year for individuals.

For families, the cost of mid-level coverage, a silver plan, ranges from $559 a month to $1,216 a month in 36 states where the federal government controls the exchanges. Tax credits will reduce the cost for many: a family earning $50,000 a year may find the price of a bronze plan cut to zero in some states.

Young and Healthy

Q: How will insurers cover the costs for all those added sick people?

A: By signing up the young and healthy. The administration said it needs about 40% of new enrollees to be in this group to help balance costs from older, sicker customers and keep premiums stable.

Q: Do Americans understand what they’re getting into?

A: No. The polls indicate consistent confusion. Three in five say the law will raise medical costs, and more say they’ll be worse off under it than better, according to a Bloomberg National Poll conducted Sept. 20-23. Half also said Republicans should back off on demands to defund the law, a schizophrenic view that’s persisted for months.

Q: So does anybody like this law?

A: Yes. Sixty-one percent of Hispanics and 91% of blacks, according to a September poll by the Pew Research Center and USA Today. That could make the sales pitch easier because those two groups comprise the bulk of the uninsured in the U.S. – 47% of the total, according to an analysis by the Kaiser Family Foundation. The law also is designed to benefit people with pre-existing medical conditions: insurers will no longer be able to deny them coverage.

Big States

Q: What’s happening in the big states?

A: Supporters have focused on states such as TexasFloridaOhio and New Jersey, where many uninsured live and Republican governors refuse to help in enrollment. California, which has the most uninsured, is spending $100 million to promote its exchange while New York plans to spend $27 million to train community groups and brokers to assist consumers.

Q: How much help do consumers get?

A: The administration is spending $67 million to train health workers, hospitals and other groups, called navigators, to help people enroll. Grants didn’t arrive until August, though, and many began a two-week training course this month. If they’re not up to the task, enrollment may suffer.

“You’re going to have tens of thousands if not hundreds of thousands of individuals who have never been exposed to health insurance before -- don’t know what a premium is, what a deductible is,” said Schuyler, the Leavitt Partners consultant.

Changes Needed

Q: Do Democrats think the law needs to change?

A: Some have called for changes: Families of workers whose company plan doesn’t include dependents can’t get subsidies. A tax credit for small businesses has been criticized as ineffective. And there are bipartisan bills in Congress to change a provision that may encourage businesses to cut workers’ hours to avoid insuring them. A quick fix seems unlikely: Republicans say they won’t tinker with a law they consider fundamentally flawed.

Q: What’s happening with Medicaid?

A: While the government health program for low-income Americans is expanding under the law, about half the states have opted out. The Obama administration last week agreed to let Arkansas use the money to help poor citizens buy private insurance on its exchange. The deal could entice other states where Republicans have opposed the expansion.

Expense Rising

Q: Is Obamacare making health-care more expensive?

A: Time will tell.

Medical costs have moderated in the U.S. the past three years, offering some relief to the public and private sectors alike. Prices for medical care rose 1% in July compared with a year earlier, the lowest growth rate since the 1960s, according to U.S. Commerce Department data.

There’s a debate among economists about how much credit to give the health law compared with a weak economy and employer moves to curtail benefits. Obamacare supporters say at least some of the slowdown is thanks to regulations and pilot programs in the act aimed at reducing waste in the medical system.


What happens on Oct. 2?

Originally posted September 18, 2013 on

Will you be ready for the day after the Affordable Care Act’s public exchanges go live?

At 2 p.m. ET on Oct. 2, EBN and EBA will offer a web seminar on issues relating to ACA implementation and what they mean for employers – whether or not they plan having their workers participate in ACA marketplaces. Hosted by SourceMedia’s Employee Benefit News Group Editorial Director David Albertson, the webinar will include speakers such as Rodger Bayne, president of the Benefit Indemnity Corporation.

Topics of the hour-long, real-time seminar are set to include updates on the functionality of state and federal exchanges, the mandate that employers educate on health care marketplaces, the union push for qualified health plans and enrollment in individual and small business exchanges. The web event is designed for businesses of all sizes, as well as the brokers, advisers and third parties who consult and assist them.

Americans at large remain demonstrably confused over ACA and its applications; wise plan sponsors will use benefits communication to stay ahead of the curve on employee inquiries. Any further delays of ACA mandates will also be discussed.

HHS releases federal exchange rates

Originally posted by Allison Bell on September 25, 2013 on

With the public exchanges under the Patient Protection and Affordable Care Act preparing to open their phone lines and their Web enrollment sites Tuesday, the Obama administration is getting closer to revealing what federal exchange plans might actually cost.

A health policy office at the U.S. Department of Health and Human Services on Wednesday released a report showing what the average starting price for individual bronze, silver, gold and catastrophic exchange coverage will be for a 27-year-old in each state in which HHS will be running a "federally facilitated exchange."

The report also shows what the starting price for each level of individual coverage will be in the biggest city in each FFE state; what a 27-year-old individual coverage buyer with an annual income of $25,000 and access to exchange tax credits would pay for the lowest-cost coverage out of pocket; and what a family of four with an annual income of $50,000 would payout-of-pocket if it did or did not have access to the tax credits.

In Texas, for example, the average cost of the cheapest bronze coverage available to a 27-year-old would be $139 per month. The average cost of the cheapest gold coverage available would be $225 per month.

In Houston, the state's largest city, bronze coverage for the 27-year-old would start at $138 per month.

A look at medically underwritten 2013 rates available from for a 27-year-old who lives in Houston suggests that typical carriers there would now charge that consumer about $100 to $300 for coverage per month, with a majority charging $100 to $200 per month.

The family of four might have to pay $727 per month for silver coverage if it had no tax credits. Tax credits could cut the monthly cost of the coverage to $282.

Vermont posted preliminary exchange rates in April, and State Refor(u)m has posted a map showing that 27 states and the District of Columbia had at least posted preliminary rates for their state-based or federally facilitated exchanges as of Monday.

HHS — the parent of the Centers for Medicare & Medicaid Services, the agency running the exchanges — has repeatedly postponed the release date for FFE rate information without explaining why.

Some states have used state public records laws to justify releasing FFE exchange plan information on their own.

Other states, including Texas, have treated the FFE plan rates as confidential information.

HHS officials said the cost of the "second lowest cost silver plan" in the District of Columbia and 47 states is 16 percent lower than what HHS had expected, based on Congressional Budget Office projections.

HHS Secretary Kathleen Sebelius said in a statement that high prices have shut many consumers out of the health insurance market in the past.

"We excited to see that rates in the marketplace are even lower than originally projected," Sebelius said.

More on the Oct. 1 ACA notices: Who has to provide them

Originally posted by Keith R. McMurdy on

After last week’s reminder about the Oct. 1 deadline for Affordable Care Act communications, the following question came up frequently — Does the notice requirement apply to employers with less than 50 employees?

Further clarification is provided in Technical Release 2013-02 called “Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act 18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985.” Section 18B of the FLSA was added as a result of the ACA. And it is 18B of the FLSA that contains the notice requirement that employers must communicate about the ACA with their employees. Overall, it says that every employer that is subject to the FLSA must provide the notice about coverage options. Fact Sheet 14 from the U.S. Department of Labor tells us that businesses covered by the FLSA must have at least two employees, and are those that have an annual dollar volume of sales or business revenue of at least $500,000 or are hospitals, businesses providing medical or nursing care for residents, schools and preschools or government agencies.

So, if your business is subject to the FLSA, you have to give the notice to employees of coverage options to existing employees by Oct. 1, and to all new hires within 14 days. It does not matter if you have 10 or 35 or 50 or 100 employees. If you are subject to the FLSA, you have to provide the notice.

Keith R. McMurdy is a partner with Fox Rothschild, focusing on labor and employment issues. He can be reached at or 212-878-7919.

This alert is intended for general information and educational purposes and should not be taken as specific legal advice. 

Should exchanges be part of your company's plan?

Originally posted August 06, 2013 by Justyn Harkin on

Although considering the new health care exchanges may have seemed radical a few weeks ago, now that everybody gets to drop ten and punton the employer mandate penalty in 2014, the idea may not be so strange.

Sure, migrating employees to the exchanges isn’t right for every organization. If the move would upset your workforce, then keeping your current group plan is probably best. But if employees would view exchange offerings as equal or better than what they current have, then there could be plenty of upsides.

If you think the exchanges would be better than what you have now for both your company and your employees, or even if you just want to get a leg up on communications (and believe me, that’s never a bad idea), then you and your employees have three options — public exchanges, private exchanges (fully insured), private exchanges (self-insured).

Which one might be best for your organization? Let's see.

Public exchanges

One of the most attractive ideas about moving to a public exchange has to be handing over the considerable financial and administrative burdens for running your company’s health benefits.

For some organizations, the move might be cheaper than what they are doing now. Even when you factor in the likely, eventual activation of the $2,000-per-employee fine for not providing insurance, you could still be paying less than what you would if you were covering premiums.

Of course, sending employees to public exchanges isn’t necessarily a slam-dunk move. Your workforce could straight-up riot if you tell them you’re cutting health benefits, and even if you raise salaries (oh, hello there, higher payroll taxes) to help them cover the costs of buying their own insurance, your recruiting efforts could take a hit if your competitors keep their health benefits.

Private exchanges with fully insured plans

Perhaps the biggest advantage of using a private exchange is the ability to shift some of the rising costs of health care to employees and give them the ability to control their spending.

In a private exchange, employees get an allowance from their employer that can be used to buy insurance. The idea is that giving employees control of the purchasing decision takes some of the heat off of your company. After all, if the cost of health care rises, that’s not your fault?

So what’s the downside to this type of exchange? Well, in the worse-case scenario it’s a less healthy, less productive workforce. Because employees will be making purchasing decisions, they may choose lower premiums over better coverage, and that can contribute to poorer health and higher rates of absenteeism.

Private exchanges with self-insured plans

The last of your exchange options are private exchanges with self-insured plans. Compared with the types of plans offered on public exchanges and private exchanges with fully insured plans, the plans available on private exchanges with self-insured plans can seem very attractive employees — generally lower premiums, more generous plan features, and more in-network doctors — but they will be more expensive.

The self-insured private exchange option might be slightly more expensive than what you could do with a fully insured private exchange, that’s true, but the available plans would be more oriented toward long-term health.

Still, using self-insured plans means you’ll have to assume all the risk and pay for all your employees’ claims. Also your employees will become customers of the private exchange insurance companies, and that means you won’t have the same influence (over the companies or choices) that you would otherwise have.

How will you spend the bonus year?

Assistant Secretary for Tax Policy Mark J. Mazur’s July 3 announcement might have seemed like the best health care reform–related thing to happen to employers all year.

If you take the “transition year” at face value, meaning the mandatory employer and insurer reporting requirements are being postponed, then you have the perfect chance to carefully consider your company’s next moves.

Maybe you’ll decide to take the plunge. Perhaps you’ll rule out the exchanges altogether. You might even decide to let other companies test the waters first so you can be prepared later on.

No matter what path you chose, though, the most important thing is taking the time to make the best decision for your company and your employees. And then communicate that decision in a clear and engaging way. Good luck!

Navigator, broker roles sealed in final CMS ruling

Originally published by Gillian Roberts on

July 15, 2013

The U.S. Department of Health and Human Services remains steadfast in its plan to hire navigators to assist and guide people through their options on the exchanges. It will also maintain a relationship with brokers and agents to provide their own recommendations to people considering or entering exchanges.

The Centers for Medicare and Medicaid Services late Friday released a final rule the navigator program, confirming that the role of navigators will be assistance-oriented and stating, as the group has on numerous occasions, that brokers and agents can be navigators if they choose to do so, but otherwise remain separate from navigators.

“We expect that agents and brokers will continue to play an important role in educating consumers about their health coverage options and, unlike navigators and non-navigator assistance personnel, will also be able to sell consumers health insurance coverage,” according to the ruling.

If brokers and agents do choose to become a navigator, “they would not be permitted to receive any direct or indirect consideration from a health insurance or stop-loss insurance issuer in connection with the enrollment of any individuals or employees in QHPs or non-QHPs,” the ruling states.

In April, Gary Cohen, director of CMS’s Center for Consumer Information and Insurance Oversight, elaborated on this sentiment to EBA: “They are not making recommendations, they’re not selling,” he said of navigators. “Some things are the same; they will [both] provide education and inform people about options available to them. But I think you go to an agent because you want to ask the agent sort of the bottom-line question, ‘What do you think I should do?’ And if a navigator is asked that question they’re going to say, ‘I can’t tell you what to do.’”

"NAIFA remains concerned that consumers will be confused about the limitations of navigators," Robert Smith, president of the National Association of Insurance and Financial Advisors, said in a statement today. "Brokers do much more than sell insurance ... Brokers explain critical differences in plan options and coverage. This may involve substantial research and fact-finding about the client’s needs."

The federal government and states that are operating their own exchanges are expected to release a training portal for both navigators and brokers/agents who plan to aide people on the exchanges. A marketplace timeline provided by CCIIO for the rollout of the Affordable Care Act says that this training will be complete by August. However, CMS officials said Monday that the training portal will be developed now that the navigator ruling is final. They did not comment on timing.

The final rule also establishes that certified application counselors are “another type of assistance personnel available to provide information to consumers and facilitate their enrollment in QHPs and insurance affordability programs,” the rule states.

The National Association of Health Underwriters said this morning that they are still evaluating the full regulation, which is 145 pages. At the NAHU conference last month brokers told EBA that they understood navigators were a reality but are confident that their role, advising people on their options, will remain invaluable.

PPACA struggles to meet make-or-break deadline

Originally posted by David Morgan on

(Reuters) - With time running out, U.S. officials are struggling to cope with the task of launching the new online health insurance exchanges at the heart of President Barack Obama's signature health reforms by an October 1 deadline.

The White House, and federal agencies including the Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS), must ensure that working marketplaces open for enrollment in all 50 states in less than 80 days, and are responding to mounting pressure by concentrating on three essential areas that will determine whether the most critical phase of PPACA succeeds or fails.

"The administration right now is in a triage mode. Seriously, they do not have the resources to implement all of the provisions on time," Washington and Lee University professor Timothy Jost, a healthcare reform expert and advocate, told an oversight panel in the U.S. House of Representatives last week.

Current and former administration officials, independent experts andbusiness representatives say the three priorities are the creation of an online portal that will make it easy for consumers to compare insurance plans and enroll in coverage; the capacity to effectively process and deliver government subsidies that help consumers pay for the insurance; and retention of the law's individual mandate, which requires nearly all Americans to have health insurance when Obama's healthcare reform law comes into full force in 2014.

Measures deemed less essential, such as making larger employers provide health insurance to their full-time workers next year or face fines, and requiring exchanges to verify the health insurance and income status of applicants, have already been postponed or scaled back.

"The closer you get to the actual launch, the more you focus on what is essential versus what could be second-order issues," said a former administration official. "That concentrates the mind in a different kind of way, and that's what's happening here."

But the risk of failure in the form of major delays is palpable, given the administration's limited staff and financial resources, as well as the stubborn political opposition of Republicans, who have denied new money for the effort in Congress and prevented dozens of states from cooperating with initiatives that offer subsidized health coverage to millions of lower income uninsured people.

Any further delay could help Republicans make PPACA's troubles a focus of their campaign in next year's congressional midterm elections and in the 2016 presidential race.

HHS denies that its strategy has changed and insists that implementation continues to meet the milestones laid out by planners 18 months ago.

"All of the systems are exactly where we want them to be today. They will be ready to perform fully on October 1," said Mike Hash, director of the HHS Office of Health Reform.

White House officials acknowledge the approach of the open enrollment deadline has put a greater emphasis on priorities. They describe the strategy as a "smart, adaptive policy" and assert that delayed or scaled-back regulations demonstrate better policy decisions or flexibility with stakeholders, rather than a need to minimize distractions.

No Margin for Error

Advocates point out that the reform, formally titled the Patient Protection and Affordable Care Act and informally known as Obamacare, constitutes the most sweeping healthcare legislation since the creation of Medicare and Medicaid, large successful government programs for the elderly and the low income that also faced fierce political opposition when they were created in 1965. Both required years of work after their launch to refine implementation.

The administration has already delayed or scaled back at least half a dozen health reform measures since last year. These include regulations involving star quality ratings for insurance company plans, the choice of insurance plans for small-business employees and a requirement that state Medicaid agencies notify individuals of their eligibility for federal assistance.

Other efforts that could still be delayed include deadlines for some health insurers to get their plans certified by HHS as well as requirements for how the insurance exchanges provide customer service.

House Speaker John Boehner and other House Republican leaders, warning of a "train wreck", have called on Obama to defer an essential task: the individual mandate, which requires people to have insurance coverage in 2014 or face penalties that begin modestly, but rise sharply by 2016.

But experts say it is the other essential tasks - establishing the high-tech capabilities necessary to process government insurance subsidies and create online shopping and enrollment for consumers - that could be most vulnerable with such a compressed timetable.

"The biggest hurdle is to get the systems up and running," said one health insurance official. "Nothing's happened so far that prevents you from being up and running on October 1. But there's virtually no margin for error."

The administration is working according to an ambitious schedule for testing a technology hub and its ability to transfer consumer data on health coverage, income, tax credits and other topics between federal agencies, insurance companies and states. The hub is already exchanging data between the necessary agencies.

A report from Georgetown University's Center on Health Insurance Reforms says state-run exchanges are on track for a successful October 1 launch and have exceeded federal minimum requirements in some cases.

Failure to have adequate systems in place by September 4, when HHS is due to give insurers final notice about which health plans are qualified to be sold on 34 state exchanges run by the federal government, could delay open enrollment by days or weeks but still allow the law's core reform provisions to take effect on January 1, experts said.

Insurers will have several days in August to review plan data as it would be presented to prospective enrollees in side-by-side comparisons online. The administration also needs to test the system with a wider audience than the IT experts working on the exchanges to make sure they are consumer-friendly.

Michael Marchand, spokesman for Washington's Health Benefit Exchange, said the state's online marketplace had conducted frequent tests with the federal data hub, which had worked well so far. But any last-minute changes to the government's requirements to its operations could throw a wrench into the IT system, he said.

"If you start adding or removing lines of code it could bring the whole thing down," he said. "As you add or take away pieces, you have to re-test from the beginning."

(Additional reporting by Patrick Temple-West in Washington and Sharon Begley in New York; Editing by Michele Gershberg, Martin Howell)